REAL ESTATE SALES STRONG Record $415 Million Sold By WILLIAM SPENCE The Daily Inter Lake Favorable interest rates and a healthy job market helped local brokers keep a real estate recession at bay in 2001.   A record $415 million in commercial and residential property and land was sold during the year, according to figures from the Northwest Montana Association of Realtors.  Residential sales topped $286 million, up about 1 percent from 2000.  There were 1,661 units sold, an increase of 2 percent.   "The last two years have been the best this real estate market has ever seen, " Said Gregg Schoh, president of the association and a broker with RE/MAX Land & Lake Realty in Lakeside.  "I expect this year to be very similar," he said.  "This is the busiest winter I've ever seen.  I think 2002 will be a real healthy year." More than $800 million in property traded hands in the last two years, according to the association, which reports sales in Flathead County and portions of Lake and Lincoln Counties.  That includes $570 million in homes, with Kalispell and Whitefish accounting for more than half that amount. The Columbia Falls area, though, may be the hottest market in the valley.  A total of 196 homes sold there last year, up 25 percent from 2000 and up almost 50 percent from 1999.   "It's amazing how busy we've been," said Bill Dakin, broker/owner at Columbia Falls Realty.  "We've really labored under a tight inventory, particularly in the mainstream price range" of $90,000 to $125,000. Much of the interest is coming from people who are being priced out of Whitefish, he said.  The median home price in Columbia Falls last year was $99,850, compare to $162,500 for Whitefish.  Only Bigfork, at $170,5000 was higher. High-end home sales, which fueled a 32 percent increase in residential sales in 2000, cooled slightly last year, as stock market declines and the uncertainty following September 11 caused buyers to hesitate.  Sales of homes priced $250,000 and higher totaled $109 million last year, compared to $119 million in 2000; the number sold dropped from 238 to 230. Inventory levels offered the most visible evidence of a high-end slowdown:  There were 496 active listings for homes in the quarter-million-plus price range at the end of 2001, compared with 381 the prior year.  The availability of homes priced under $250,000 was essentially unchanged at 1,045, compared to 1,020 listings at the end of 2000. Cindy Stein, broker/owner with Chuck Olson Real Estate in Whitefish, said the high-end market was slower throughout the year, particularly after the terrorist attacks.  "There was a definite effect from September 11, but that was gone in 30 to 60 days," she said.  "We're seeing the high-end market pick back up now." Whitefish remained a popular location with buyers last year, with 271 home sales, second only to the 647 homes sold in the Kalispell area.  "The in-town market was really active," Stein said.  "Land sales were pretty active -- there's so little available around Whitefish -- and there was a definite pickup in condo/townhome properties." Like Schoh, other brokers expect 2002 to be on a par with last year.  "There are a lot of people out shopping right now, waiting for the right thing to come along," Dakin said.  "If interest rates remain low, 2002 will be more of the same." "We've been busier this last year than we've ever been," said Edna Hellickson, broker/owner with Century 21 Home & Investment Center in Kalispell.  "I expect a very hot market this summer." Report Bill Spence may be reached at 406-758-4459 or by e-mail at bspence@dailyinterlake.com

It should be noted that it is very important to realize that the specific location is extremely important to the potential investor in Montana, including Flathead County.  Some areas are not as concerned with long range planning, codes, covenants and restrictions.  This means that their individual development choices could dramatically impact your re-sale value.  

Some areas of the Flathead Valley are developing more rapidly and are indeed very nice, however they are not as encumbered by codes, covenants and restrictions, as the typical upscale investor would want them to be to protect the client's sizeable investment, as well as their total quality of life. 

Supply and Demand in Paradise

Flathead County see record level of subdivision activity.  Article by William Spence, The Daily Interlake January 12, 2003.  bspence@dailyinterlake.com

A record amount of land went into subdivisions in Flathead County during 2002, as demand for this corner of paradise showed no sign of tapering off.  Plans for 89 commercial and residential subdivisions received final approval during the year.  The projects were located throughout the valley, and covered a total 652 lots and almost 3,000 acres of land.  The previous record was 2,006 subdivided acres set in 2000.   

The number of lots created last year was also well above the five year average of 401.  Nevertheless local realtors say there's no indication that a glut is developing.  "If there were a glut we'd be seeing the active inventory increase or a softening in price, and neither of those are happening at this point," said Rick Doran, owner of Montana Brokers and current president of the northwest Montana Association of Realtors.  In fact Doran said the number of vacant lots on the market is virtually unchanged with 1,557 left at the end of 2002, compared with 1,521 at the end of 01.

Sales of vacant lots were quite strong last year, up 25 percent from the year before to 1,042.  A third of those were for lots 1 acre or smaller in size.  The median lot price edged up 8.5 percent, to $48,825.

"Supply and demand appear to be staying in relative balance," Doran said.  "There's demand to meet the additional supply, but we also aren't seeing an out-of-control price escalation."  As with any business though various factors can tip that balance one way or the other.  Some of the issues facing developers:

CONTINUED DEMAND:   The valley's pace of subdivision development might be ahead of the five year average, but based on population growth projections, it's barely keeping up with demand.  The Montana Department of Commerce's Census and Economic Information Center estimates that Flathead County will grow by 20 percent during this decade, compared with 25.6 percent during the 1990's.  That would be about 15,000 people or 6,000 households.  An average of 600 new housing units per year. "There are very few areas that can compete with the Flathead  in terms of amenities," said Greg Carter at Rocky Mountain Real Estate in Whitefish.  "With a national park, the abundance of water and relatively mild weather, there's a national demand for property here."

UNCERTAIN SUPPLY:  This side of the equation is a little murkier.  Federal and state agencies own the bulk of the land here, so the supply of suitable land is limited to begin with, and that only gets smaller with time as more and more people buy their piece of paradise.  How much is available  for development at any given moment depends on a wide range of factors, from property tax rates and agricultural prices to zoning regulations and water quality standards.  In the near future, there's little evidence of a supply crunch:  Last year, 58 major and minor subdivisions received preliminary approval, so the pipeline of projects remains full.  

However, during the five year period that ended in 1997, Flathead County lost an average of 235 acres of farmland per week to subdivisions and other development, more than 60,000 acres in all.  And as the availability of suitable land declines , developers are seeing prices creep up.  "The price of farmland has gone up 100 percent over the last five to seven years." Carter said.  "It's not hat it's ultra expensive , it may have gone to around $10,000 to $12,000 per acre.  But in areas with good views, it's gone up more than that."  Carter, who has developed three subdivisions in the valley and dozens of projects in other areas said rural land that's reasonably close to Kalispell or Whitefish is currently going for $10,000 to $15,000 per acre.

AFFORDABILITY:  By the time necessary services and infrastructure are installed , the cost to build a subdivision easily can be four or five times the cost of the raw land cost.  As property values increase more and more families are priced out of the rural lifestyle.  Just a few years ago , people could find decent lots